SINGAPORE is the second hottest target market in the world for global retailers, according to a recent study by research firm CBRE.
Second only to Tokyo, Singapore saw 58 new entrants over the course of 2014 - double the number reported in 2013. Food and beverage operators were the most active with expansions, followed by retailers of mid-market apparel and accessories such as sports goods, ladies fashion, footwear and handbags.
Despite strong competition from new suburban clusters, the study also found that the Orchard Road strip continues to be the most popular shopping location for retailers, with the recent completion of new complexes such as Shaw Centre and Orchard Gateway paving the way for further expansion.
One such retailer, for instance, is American sportswear company Under Armour, which opened in Orchard Gateway last May. According to Under Armour South-east Asia chief marketing officer Adrian Chai, the brand strategically chose Singapore as its regional hub due to the city's central location that facilitated travel and logistics to neighbouring countries. Orchard Gateway presented "a natural opportunity" as it is the newest mall in the area with direct access to the MRT network, Mr Chai added. The brand now has two more outlets in Collyer Quay and Tampines.
Among luxury brands seeking a first home in Singapore, the Shoppes at Marina Bay Sands ranked as the top choice as the retail complex is known for proactively upgrading its tenant mix and offers a steady stream of affluent-shopper traffic from its enclosed gaming resort, the study said.
Besides housing over 170 luxury and premium brands, the complex recently underwent a three-year retail remix, and emerged with an assembly of 15 luxury duplex and triplex stores for brands such as Dior and Gucci, many of which are the brands' largest stores in Singapore.
However, the study also found that amid the surge of new retail entrants to Singapore, some consolidation of networks occurred in the second half of 2014 due to declining visitor numbers from mainland China, sluggish retail sales growth and manpower shortages. As a result, new brand entries will decelerate, retailer networks may shrink and future entry into the market may take longer, CBRE said.
Outside of Singapore, Tokyo boasted the highest number of new retail entrants on the list, with 63 setting up shop last year, despite mixed signals from the Japanese economy and a hike in the country's sales tax to 8 per cent last April. Abu Dhabi, Taipei and Dubai ranked third, fourth and fifth on the list respectively.
Additionally, the study found mid-range fashion retailers to be the most active globally, accounting for over 21 per cent of international expansion, followed by luxury and business fashion retailers at 20 per cent.
In Asia specifically, luxury and business fashion retailers drove 24 per cent of the region's business expansion, followed by coffee and restaurant retailers at 22 per cent.
Of the 334 leading international brand retailers from the 61 countries and 189 cities polled, 79 per cent of Asian brands said that they would continue to target their own region for expansion, while 41 per cent of American retailers have also set Asia as their priority for expansion.
CBRE Asia-Pacific regional managing director and head of brokerage services Manish Kashyap said that it was "not surprising" that Asia features heavily on the list of target cities for new retailer entrants, with six out of the top-ranked 15 cities coming from the Asian region.
"The core elements of globalisation, technology and demographic change are continuing to have a dramatic impact on the retail business, encouraging global retail expansion. As retailers look to drive market share and raise their brand profile, they will continue to expand and look for opportunities beyond their home territories," he added.